With all the options available to create your personalized estate plan, it can be overwhelming to figure out which documents are the most important for your situation. A will is the cornerstone of estate planning, and powers of attorney are useful for incapacity, so these will certainly be on your list. However, some people may benefit from preparing a revocable living trust as part of the arrangement. The US Consumer Financial Protection Bureau (CFPB) defines a revocable living trust as a document in which a grantor grants authority over financial matters to a trustee. The trustee manages property held by the trust according to the instructions in the document.
Revocable living trusts have a reputation as being only for the rich, but net worth is just one of many reasons to consider creating one. There are other goals you may want to achieve with your estate plan, so it is wise to consult with a trusts and estate planning lawyer to assess your options. A revocable living trust may be a suitable solution if you want to take advantage of the following:
Beneficiaries need controls
If your beneficiaries are younger or not as sophisticated with financial matters, a trust can establish controls that protect your legacy. You can include provisions to distribute funds when the person reaches a certain age or life milestone, either as a percentage of the trust value or a specific amount. Many grantors will release funds periodically, such as separate distributions, when the beneficiary reaches 25, 30, and 35 years old. With outright distributions, there are no protections to keep a beneficiary from squandering the funds.
You have privacy and confidentiality interests
Upon your passing, your will gets filed with the probate court and becomes a public record. All of the information, beneficiary names, and private details are available to anyone who wants a copy. A revocable living trust is not filed with officials, so all the terms and conditions remain confidential.
Your goal is to avoid probate
When you create a trust during your lifetime and fund it by transferring real estate and personal property into it, you effectively do not own those assets. At your death, there is no property to go through the estate administration process. You avoid probate because the terms of the trust remain in effect for your successor trustee to manage.
You want to support someone with special needs
A person with disabilities is often eligible for many public assistance programs, but some are needs-based. The individual could be disqualified from receiving benefits if you directly distribute funds because he or she becomes too “rich.” You can avoid this situation by including a special needs trust within your living trust.
Consult With a Trusts and Estate Planning Attorney for Additional Details
A revocable living trust may be a suitable fit for your situation, so please contact Francois Williams Legal LLC to get legal advice on your options. We can set up a consultation to review your circumstances, understand your goals, and get started with preparing your estate plan.